Allahabad High Court
M/S SALH INDUSTRIESversusSTATE OF UP AND ANOTHER
- Decided
Holding
The adjudication order dated 5 December 2025 is set aside.
Summary
Salh Industries challenged an adjudication order dated 5 December 2025 issued under Section 74 of the Uttar Pradesh GST Act, 2017. The company's GST registration had been cancelled on 21 May 2021, but a show‑cause notice was served only through the Common Portal on 28 June 2025, more than four years later, leaving the company unaware of the proceedings and resulting in an ex‑parte adjudication. The petitioner argued that after cancellation, service of notice must be physical, as mandated by a circular dated 7 May 2025 issued by the Commissioner of Commercial Tax. The High Court accepted that the portal notice was ineffective post‑cancellation, set aside the adjudication order, and directed the petitioner to file a reply to the notice within two weeks and allowed applications for cross‑examination or document production before a personal hearing. The adjudicating authority was instructed to fix a hearing with at least 15 days’ notice and to pass a reasoned order by 30 November 2026.
Issues considered
- Whether an adjudication order passed under Section 74 of the UP GST Act is valid when the show‑cause notice is served only electronically after the taxpayer's registration has been cancelled.
- Whether the circular issued by the Commissioner requiring physical service of notice after cancellation is binding on the adjudicating authority.
- Whether the petitioner is entitled to a personal hearing and opportunity to cross‑examine witnesses after the ex‑parte order.
Legislation cited
- Uttar Pradesh GST Act, 2017 — s. 74
Subjects
- GST
- Section 74
- adjudication
- ex parte order
- notice service
- registration cancellation
- personal hearing
- show‑cause notice
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT TAX No. - 3673 of 2026
M/S Salh Industries
.....Petitioner(s)
Versus
State of U.P. and Another
.....Respondent(s)
Counsel for Petitioner(s) : Ajay Kumar Yadav, Vishwjeet
Counsel for Respondent(s) : C.S.C.
Court No. - 39
HON'BLE SAUMITRA DAYAL SINGH, J.
HON'BLE SWARUPAMA CHATURVEDI, J.
1. Heard Sri Ajay Kumar Yadav, learned counsel for the petitioner and Sri
Arvind Kumar Mishra, learned Standing Counsel for the revenue.
2. Challenge has been raised to the adjudication order dated 05.12.2025
passed by the Deputy Commissioner, State Tax, Sector-3, Muzaffarnagar,
under Section 74 of the UP GST Act, 2017.
3. Short ground pressed is that the registration of the petitioner was
cancelled on 21.05.2021 whereas the show-cause notice was issued only
through Common Portal i.e. through electronic mode on 28.06.2025, under
Section 74 of UPGST Act, 2017 for Assessment Year 2018-2019, more than
four years after cancellation of the registration. For that reason, the petitioner
was not aware of the adjudication proceedings. It thus remained ex parte.
4. Only upon recovery being pursued against the petitioner as a consequence
of ex parte adjudication order dated 05.12.2025, the petitioner acquired the
knowledge of the same. It may be noted that the Commissioner of
Commercial Tax, U.P. vide its Circular dated 07.05.2025 issued binding
instructions to its subordinate authorities to ensure service of physical notice
on the noticees facing adjudication proceedings initiated after cancellation of
their respective registration.
5. The above Circular is founded on sound common sense inasmuch as once
the registration of a person is cancelled, he may remain disabled and in any
case he may not be obligated to work on the Common Portal, thereafter.
WTAX No. 3673 of 2026
2
Unless the person works on the Common Portal against the registration
number assigned to him, he may remain unaware of any proceedings
instituted against him, after cancellation of its registration.
6. Confronted with the situation, learned Standing Counsel would submit, in
face of the Circular issued by the Commissioner, there can be no quarrel
with the above proposition.
7. In view of the above, no useful purpose may be served in keeping the
present petition pending or calling for a counter affidavit, at this stage.
8. Accordingly, the present writ petition is disposed of on the following
terms :
(i) The impugned adjudication order dated 05.12.2025 is set aside.
(ii) The petitioner may file its final reply to the show-cause notice dated
28.06.2025 within a period of two weeks from today.
(iii) If the petitioner wants to claim an opportunity to cross-examine any
witness or to be supplied documents relied upon etc., the petitioner may
necessarily make such application alongwith reply. Such application, if filed
may be dealt with and decided before fixing any date for final hearing.
(iv) Thereafter, the adjudicating authority may fix and communicate the
petitioner the date for personal hearing with at lease 15 days advance notice.
(v) The adjudicating authority may then pass appropriate reasoned order
within a further period of one month such that the proceedings may be
concluded on or before 30.11.2026.
(Swarupama Chaturvedi,J.) (Saumitra Dayal Singh,J.)
September 8, 2026
#Vikram/-
Digitally signed by :-
VIKRAM GUPTA
High Court of Judicature at Allahabad
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